Reserves
Popular Annual Financial Report FY 2024
A City’ s reserves are crucial for maintaining essential services and financial stability during economic downturns. In accordance with the City’ s Financial Policies, several cash reserves are maintained to equal at least 15 % of recurring annual General Fund expenditures.
RESERVE LEVELS
• Unallocated Reserve: Funded at $ 10,761,910 in FY 2024 for emergencies.
• Working Capital Reserve: Largest reserve, funded at $ 29,886,610, covers one month of expenditures.
• Additional Reserves: Total $ 22,931,305.
TOTAL RESERVES
• 20 % of General Fund budget, exceeding the 15 % target by approximately $ 16.29 million.
These reserves are also an important consideration by bond rating agencies in determining the City’ s overall creditworthiness, which is why the City has maintained reserves more than its 15 % target.
The major reserves include the Unallocated Reserve, which is equal to at least 3 % of recurring General Fund expenditures and designed to be used for emergencies and unanticipated expenses. This reserve was funded at $ 10,761,910 in FY 2024.
The Working Capital Reserve sets aside one month of recurring General Fund expenditures to provide adequate operating cash during normal revenue and expenditure cycles. This is the City’ s largest reserve and was funded at $ 29,886,610 for FY 2024.
Three additional reserves, Business Continuity, Landfill Lease, and Other Post Employment Benefits total $ 22,931,305. The total reserve amount adopted in the FY 2024 Budget is 20 % of the City’ s recurring General Fund budget. This amount is approximately $ 16.29 million in excess of the 15 % overall reserve level specified in our financial policies.
AA1 / AAA RATINGS
• Permanent Improvement Bonds
• Certificates of Obligation
• Municipal Drainage Utility
• System Revenue Bonds( Stormwater)
• Water and Wastewater System Revenue Bonds
Bond Rating
Moody’ s, Standard & Poors( S & P) and Fitch rate our creditworthiness and they consider our reserves as one of our strongest assets.
In FY 2024 Moody’ s and S & P affirmed our Aa1 / AAA ratings for the Permanent Improvement Bonds, Certificates of Obligation, Municipal Drainage Utility System Revenue Bonds( Stormwater), and the Water and Wastewater System Revenue bonds. These strong ratings allow us to issue municipal debt vital to the Arlington’ s infrastructure at a very low cost to the City.
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